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Into the new frontier

News

Cite as: November 2014 88 (11) LIJ, p.21

The latest alternative model law firm took shape when a small group of top tier practitioners left their conventional career paths to start a virtual firm.  

Lawyer Jodie Baker knows what it’s like to be called crazy. Last year, she spent months pounding the streets of Melbourne’s legal precinct on a mission. She was searching for lawyers who were willing to take a risk.

It was a risk that some dismissed as misguided, others as worthy but too precarious, and then there were those who took the leap of faith into the new frontier of the legal profession. Hive Legal launched eight months ago and joined the growing ranks of law practices adopting an alternative business model to the traditional firm.

Hive Legal has seven legal practitioners, who left secure jobs with top tier firms, and 11 staff.

Hive’s managing director Ms Baker said it was “big wide grins really” from the lawyers who, she says, have felt liberated to be involved in building something from the ground up.

The “virtual firm” operates on an equal profit share model, predominantly charges fixed fees and is “infrastructure light”.

Hive Legal lawyers work from various locations and are only required to attend the firm’s central city office once a week for an hour face-to-face staff meeting.

“The model works on an empowerment philosophy so the idea is that everybody in the organisation is sufficiently experienced and senior and they know what’s required in order to deliver great outcomes for the client, so we don’t need to monitor their physical presence in order to achieve those outcomes,” Ms Baker said.

The business saves on costs by paying for specialist staffing only when needed while the office acts like a hive with workers buzzing in and out.

“When we need it we bring it in but when we don’t need it, we don’t have to be paying for it,” Ms Baker said.

Ms Baker said Hive Legal’s practitioners are excited to be involved with a business that is changing the way lawyers work.

Legal consultant, lawyer and member of LIV’s Future Focus Committee, John Chisholm, said the legal industry was in the grip of massive change.

He said the ongoing effects of the global financial crisis and the technological advances of the digital revolution had created a perfect storm for change in the legal profession.

“I think it’s just fascinating times, I’ve lost count, almost every day or certainly weekly, there are new firms starting up and they’ve all got different business models, and they’ve all got different pricing models,” he said.

From Slater and Gordon becoming a public company in 2007 to the rapid growth of online legal giant Axiom Law, which markets itself as “law redefined”, the legal industry is in flux.

Mr Chisholm warned that many within the profession are refusing to acknowledge the lasting nature of recent changes and the significant impact new business models are having on the industry.

“We’re a conservative, risk-averse profession,” he said.

Meanwhile, websites such as LawPath, Legally Yours, Lawyer Select and Avvo have seized on gaps in the online marketplace.

LawPath co-founder Damien Andreasen says the company identified a clear difference between where consumers were going to find lawyers and how lawyers were trying to engage them.

“We all know there’s been a big shift towards online but that doesn’t necessarily mean that industries are keeping up with that trend and I think that legal is one of the industries where a lot of firms don’t have a great web presence,” Mr Andreasen said.

LawPath matches clients with law firms for a subscription fee, which Mr Andreasen said was easily outweighed by the revenue generated from legal work sourced through the site. More than 500 lawyers have registered with the site since its inception 18 months ago with many lawyers recognising the changing times.

Melbourne lawyer Andrew Komesaroff was at the forefront of change, pursuing an alternative business model when he established Komesaroff Legal seven years ago.

Mr Komesaroff said his business formed out of a pragmatic need to meet his client’s needs in a flexible way.

“It was a natural extension of saying: ‘I’ve got this work, I’ve got these clients, I need different expertise at different times and how do I acquire that without employing a whole bunch of people,’” he said.

“Over time I gradually met a number of like-minded people along the way who are happy to work in a flexible way.”

Lawyers with Komesaroff Legal can work from home with expertise and administrative support sourced on an “as-needs basis”.

“I have the ability to expand and contract as needed in order to deal with particular requirements, client’s projects, transactions, whatever it might be,” he said.

Mr Komesaroff said he has no interest whether work is done at 9am or 3am, as long as it’s done in a timely way.

“It clearly does offer a solution to people who want to be involved in legal practice but for various reasons can’t commit to what you might say are traditional office hours,” he said.

Solicitor Laura Vickers said the standard business hours of 9am to 5pm are not just a problem for lawyers, they act as a deterrent to clients – a realisation that dawned on her after visiting a tax agent with her baby.

“I only imagined that people seeking legal advice were having the same experience as I was – holding a screaming child at a midday appointment while someone’s typing in my details I’ve filled in off a paper form into his computer with one finger,” she said.

Friends had long called on Ms Vickers and her barrister husband for legal advice, intimidated by the idea of talking to a high street lawyer and unable to ever find the time.

At the same time the issue of childcare was making it difficult for Ms Vickers to return to work full time so she set about starting her own online business, Nest Legal, from her kitchen table in Melbourne’s inner-north.

“The legal profession generally is not a very family-friendly place to work and it doesn’t need to be so,” she said.

“There’s no reason that lawyers need to be sitting at a desk for 60 hours a week between the hours of X and Y to provide a good service because what we offer is ideas and knowledge and advice, which can be done from wherever, whenever.”

Ms Vickers advertises her fixed fees on her website and, to avoid conflicting with her part-time work at the Victorian Government Solicitor’s Office, focuses on wills and conveyancing. She uses Skype to conduct client meetings and Facebook to reach out to prospective clients. Working parents who have wanted to organise wills for years contact her at home at 8pm after the kids are in bed. “It would be the only time they could do it, so there’s been real gratitude from the clients,” she said.

The biggest changes facing the legal profession stem from a change in clients’ expectation of service and pricing, according to Mr Chisholm. He said the competition legal firms face is no longer just from their counterparts but from multi-disciplinary professional services. “The days of protectionism for lawyers are fast running out,” he said. “It’s not a growing legal market any more, it’s diminishing.”

Mr Chisholm said there is no other profession that does not provide clients with an upfront cost and that while the billable hour may not be dead, it is “sick and it’s dying”.

He believed the digital age offered great opportunities for those that seize them, as well as a chance to address long-standing work-life balance issues faced by lawyers.

“I think the billable hour has a lot do with the non work-life balance,” Mr Chisholm said.

“I’ve got to put in the hours, so to put in the hours I’ve got to be at the firm whereas with innovative law firms, it doesn’t matter where I am.

“If I get the job done I can be sitting here in my lounge room . . . I don’t have to flog myself.”

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